Dedicated funding for LCHIP gains

Published: March 8, 2007

Over the objections of its own committee and the New Hampshire Association of Realtors, the New Hampshire House voted Wednesday to add $40 to the price of recording documents at county Registries of Deeds to create a dedicated fund for the Land and Community Heritage Investment Program.
The measure is designed to give the program a steady source of funding, even though Gov. John Lynch has asked for $6 million a year to fund LCHIP in his budget.
But lawmakers could not resist funding the popular program without draining the general fund and voted to send the bill to the Ways and Means Committee by a 197-157 roll call vote. They argued that a surcharge makes sense because the work LCHIP does attracts tourists and strengthens the economy.
But the bill has galvanized the opposition of the Realtors and the county registers of deeds, as well as a one-vote majority of the Municipal and County Government Committee, which heard the bill.
The registers said they are concerned about the cost to administer the program. House opponents said it wasn’t right that a state tax be used to set up a dedicated fund that would be controlled by a non-profit but private agency, without the kind of oversight that government agencies face.
These concerns were echoed by the state Realtors association
“Why should we make this a pet program and take it out of the budget process, while Health and Human Services, which represents the state’s neediest people, has to stand in line like everybody else?” said Jeff Keeler, chairman of the association’s public policy committee, and a Pembroke Realtor.
Realtors also don’t want to increase the cost of selling a home. While $40 may not seem much on a transaction worth hundreds of thousands, it all adds up, Keeler said.
The fee, he said, would apply to other documents associated land sale, such as mortgages and land use plans. If you include trust transfers and refinancing, the surcharge could result in hundreds of dollars more.
Besides, they argue, homeowners already pay some $120 million-a-year in real estate transfer taxes, as well as $363 million in the statewide property tax.
“We already have the highest transfer tax rate in the country,” said Keeler. “How many times do you go to well and take from the same people? “
Besides, he added, this amounts to double taxation on the same transaction, which may be ruled unconstitutional anyway.
In other action, the House, on a voice vote, killed a proposal to dedicate 4 percent of rooms and meals tax revenues to close the Department of Fish and Game’s deficit. In this case the money would be diverted, rather than tax increased (though proponents said they’d be willing to do that instead, if the bill survived) but the arguments are similar.
The bill would have diverted $4.7 million a year from the $120 million rooms and meals revenue stream. Supporters said that the department, which has historically been self- supporting, has been struggling since revenue from fees have been decreasing.
But opponents said that the state shouldn’t set up a dedicated fund for one department, especially since no additional money would be coming in. They asked the House to hold off until an audit of the department is completed.
Lawmakers also rejected on a 220-113 vote a bill to lease the state-owned Cannon Mountain ski area.
Supporters of the bill, including Rep. Fred King, R-Colebrook, argued that Cannon is losing money, unlike Mt. Sunapee, which been privately run for several years. While the state keeps on promising to upgrade Cannon so it will make money, “ski areas take a back seat to prisons and schools. We need to turn this over to the private sector.”
But opponents argued that with the ski industry in such difficulty, this is not the most advantageous time to negotiate a long-term lease -- besides, the state needs to complete a long-term study.
Besides, said Rep. Martha McLeod, D- Franconia, Cannon is part of Franconia Notch State Park, which was purchased by the state with the help of private donations “to protect it from private development and commercialization, and preserve it from the very thing we will be subjecting it to with this bill.” - BOB SANDERS

This article appears in the March 2 2007 issue of New Hampshire Business Review